Motivation in any form is an essential part of work culture. It encourages, employees to perform better. There are various methods to motivate employees and Employee Performance Appraisal is one of them.

Thus, employee performance appraisal can be defined as method by which employees performance towards their work is evaluated annually (generally) by their respective boss or reporting manager in their hierarchy level. It is also termed as Employee Appraisal or Performance Review or Performance Appraisal.

The basic objective of performance appraisal is to evaluate the job performance of an employee in terms of his –

Quality of work
Quantity of work
Cost involved
And Time taken to complete the assigned work
In brief, performance appraisal helps the management in number of ways. Some of the major benefits of performance review are as follows–

Performance review is one of the ways of recognizing employee’s work. It helps the supervisor to know about the achievements of their subordinates. This further helps them to take decisions on various motivational issues like salary increment, promotions, bonuses, rewards etc.It is very important to motivate employees for their achievements.

So, performance appraisal helps the supervisors to provide the feedback of their employees to the senior level management and give their employees their share of rewards and recognition proportionately. It is one of the great sources of motivation .It helps to develop satisfied and content employees in the organization. This further helps the organization in providing –

A) Employee retention

B) and good reputation.

Performance appraisal is also one of the way of determining, the loop whole areas of its employees. In other words, appraisals helps to identify the weak areas or skills which its employees lack .This further helps the management to identify the individual training needs of its employees and update them with the same. Performance Appraisal; thus helps in developing and acquiring new behavioral and technical skills of its employees.

Thus, performance appraisal helps to analyze and determine the relative worth of the employee with respect to their job assigned. It further helps to know, the strengths and weaknesses of the employee. In other words, performance appraisal; helps the supervisor and hence the organization to know the capability of the employee. That is, if the employee is given a responsibility and opportunity for higher job profile, will he be able to handle them and execute them appropriately.

There are very few opportunities were supervisors and subordinates sit together and share their job related issues. However,performance appraisal is one platform which makes this possible. Thus,in this way, appraisal system helps in developing strong communication link between the employee and the supervisor. This in return ,helps the management to know about the various working issues and sort them out. Beside this, it also helps in building strong working relationship between the subordinates and the supervisor.

Performance Appraisal helps in identifying the performance gap. That is, it helps in knowing the reasons behind the employee’s actual performance and the performance as expected by the organization. This further helps them to take necessary action to sort out the problem.

Performance Appraisal helps in increasing the efficiency of its employees. As a result, cumulative performance of the employees also increases .This increased performances of the employees further contributes towards increasing the organizational productivity .Thus, increased individual achievements of the employees, help in the growth and development of the organization. This implies, performance appraisal helps in achieving individual growth as well as organizational growth.

There are number of ways of appraising an employee. Each of this method has its own set of advantages and disadvantages. Hence, depending upon factors like size of an organization, type of an organization, nature of work, performance planning etc, every organization chooses its appraisal method.

One of the most common methods of appraisal is ‘Traditional Method.’ In this method, the boss and the subordinate discuss about the assigned work, and his related achievement and performance for the same. By doing so, the boss or the supervisor comes to know about his abilities and capabilities. Here, all his work, achievements, potential abilities and observations are rated on a certain scale. That is, for each different attributes and objectives; managers asses the performance of his subordinates by rating them on a numerical scale. This helps in knowing his score against each objective and attributes and thus helps in determining and deciding upon his hike in salary or promotion etc.

‘Self appraisal’ is another common method used in organizations for appraising their employees.Here, the supervisors ask their subordinates to appraise themselves. That is, in this method, it is the responsibility of the staff member to asses their own achievements and failures for their assigned work. This method thus; makes the employees to accept and take the responsibility for their own work. Self appraisal method, can be either used as a part of appraisal method adopted by an organization or can be used in addition to another appraisal method adopted for employee assessment.

‘360 degree feedback’ in the performance appraisal method, is the one where the feedback on an employee’s performance is provided by number of people who are directly or indirectly connected to him. Firstly, his boss or reporting manager. Secondly, people from different departments with whom the employee interacts. Thirdly, his peer group and external customers and lastly, the employee himself.

‘Management By Objectives’ is a method of appraisal system where the supervisor or the reporting manager and other senior members in the hierarchy level ,asses and make a list of the employee’s recent assigned task against the task performed by him. In this method, employee task is compared with respect to organization objective and how an individual work of the employee has contributed to achieve the organizational objective.